Groupon was at the forefront of the daily deals industry and has received the most criticism of late (in a recent article titled Why Groupon is poised for Collapse, TechCrunch reported that, “In many cases, running a Groupon can be a terrible financial decision for merchants”). While Groupon has been most intensely in the limelight, online daily deals are still a relatively new industry and new players are continuing to appear, with TechCrunch reporting that there are over 650 daily deals services. Google’s launch of Google Offers is among the most recent additions.
As many of you know, Google chose Portland as its beta city for Google Offers, and Floyd’s Coffee Shop in Old Town Portland was chosen by Google as one of the first Google Offers participants. Floyd’s was chosen partly because of positive online customer reviews; on their blog, Google announced that “Our first Google Offer will be from beloved local java shop Floyd’s Coffee. Husband-and-wife team Jack Inglis and Cris Chapman opened Floyd’s seven years ago, offering up espresso, coffee, breakfast burritos and more. They now have two convenient locations—one cozy, brick-lined shop in Old Town and another Stumptown watering-hole in Buckman.” The Google Offer allowed consumers to purchase $10 worth of food and drink for a mere $3.
Floyd’s happens to be located just down the street from our Synotac office and is one of our favorite local coffee shops, so after seeing the mad rush of customers at Floyd’s on the first day of the deal we were curious how the Offer would pan out for Floyd’s.
Floyd’s co-owner Jack Inglis reported that the publicity generated by the Offer was worth the investment – of course, Floyd’s benefited from extra publicity due to participating in the beta Offer. Inglis wanted to draw customers from outside the neighborhood and found that the Offer did draw fresh faces. Inglis stated his awareness of other business’ criticism of daily deals and noted that a business’ success with a daily deal “depends on the industry you’re in”. When asked whether or not he would participate in Google Offers again, he said he would, but not until they’ve fully paid off this initial round.
Deciding whether to participate in a daily deal certainly does depend on your industry, business model, customer base, and how much potential you see for gaining repeat customers. Businesses should weigh these factors carefully before participating in a daily deal.
